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They Just Run Out Of Money

It’s Friday desk clearing time for this blogger. “Real estate agents and mortgage lenders who spoke to The Post said that underwriters in the Sunshine State are forcing would-be buyers to look for cheaper dwellings. Meanwhile, existing HOA fees for condo owners have doubled in the past year. ‘Every day I get up and think, ‘Well, do I start packing?’ 72-year-old Ellen Fincher of Vero Beach told WPTV-TV. Fincher, who has owned the $360,000 three-bedroom, 2,800-square-foot home for 10 years, told the station that her $13,000 annual premium has increased to the point where she can no longer afford to pay. ‘I can’t, not when you’re on a fixed income,’ Fincher said.”

“Residents are now out of an 80 unit condominium complex at 1121 Albion Street in Denver after the building was ordered vacated. ‘I was all freaked out at first because you know we didn’t really know what was going on,’ said resident and condominium owner Phil Boden. The building has been without running water for most of the past two weeks since Denver’s record setting cold snap. Boden, who served on a prior HOA board for the Americana Condominiums says they contracted a plumber to line pipes, but work was only partially completed. ‘They just ran off with our money,’ he said about the overall situation.”

“Merritt Burnham thought he broke the cycle of paycheck-to-paycheck living when he bought his one-bedroom Summit County condominium in 2020. When he moved to Summit from Boulder in 2019, he lived for a year at his parents’ house in Frisco while he saved for a downpayment on a home. But homeownership didn’t bring the stability he’d hoped for. ‘It’s gotten crippling,’ Burnham said. ‘I didn’t even realize HOA fees could go up to $900 for a one-bedroom.’ After years of owning a second home in Keystone, Dave Miller is looking to sell. His two-bed, two-bathroom condo has sat on the market since October and already came down $50,000 in price, from $765,000 to $715,000. That puts the condo well below the average price for a multifamily unit, which was $953,000 in 2023. ‘We are having a hard time getting anybody interested in it because they keep coming back to the high HOA fees,’ Miller said.”

“Glen Jasmer is a widower and a reluctant landlord. Glen’s late wife owned the home when the two got married. After renting it in 2020 it’s become a legal nightmare. The only view he gets of the place is peeking over the fence, which currently resembles a garbage dump. ‘They don’t pay their garbage bill, which is mandatory in the city of Puyallup.’ At one point the water was cut off. Now, Neighbors complain of vermin. Through all of this, he’s been attempting to evict his tenants. He claims his total losses are nearing 50 thousand dollars. He says it’s unfair that tenants were represented by a free lawyer and that he – and all taxpayers – pay for this. After more than three years and all the damage, the court ruled for Glen to regain control of his home. Seeing the extensive damage brought Glen to tears. ‘I Just want to get it over with, and I never want to come back. This is the last time I want to be here.'”

“House prices are falling across Texas, according to recent data, with the former pandemic boomtown of Austin reporting the most dramatic plunges in the entire state. Journalist Lance Lambert, who curates his own house price tracker for the Resi Club, shared on X. According to his tracker, Austin recorded the biggest house price drop year-over-year of the list, with a 7.2 percent decrease between December 2022 and December 2023 and a 20.1 percent plunge since its 2022 peak. What these cities have in common, especially Austin and San Antonio, is that they used to be among the most overheated markets in the country. Austin and San Antonio experienced the highest home-price appreciation in recent years during the pandemic. This correction appears to still be ongoing. The average Austin home value was $527,205 as of December 31, down 8.2 percent compared to a year before, according to Zillow. Prices have been dropping consistently since reaching a peak of $630,308 in June 2022.”

“Humboldt County is on the verge of passing a formal ordinance regulating short-term rentals such as Airbnbs and Vrbos in unincorporated parts of the county, though the final decision was delayed for a month. Second District Supervisor Michelle Bushnell asked if there could be exceptions to the cap. Her district does not face the same housing crunch present in the rest of the county given its historic reliance on cannabis cultivation, an industry currently in a tailspin due to several factors such as statewide overproduction. In 2023’s third financial quarter, Garberville, in Bushnell’s district, saw some of the highest foreclosure rates in the country. ‘If we don’t offer options, and people get into a really sticky situation with their mortgages, they’re going to do it anyways,’ Bushnell said.”

“Taggers have graffitied what appears to be more than 25 stories of a downtown Los Angeles skyscraper that’s been sitting dormant for several years. Construction on Oceanwide Plaza, a $1 billion mixed-use retail and luxury apartments project with three towering unfinished structures, stalled in January 2019 after the Beijing-based developer lacked the funds to complete it, the Los Angeles Times reported. One witness, Daron Burgundy, said the taggers had been blasting the building with spray paint for the last three nights. ‘I could see people up on the balcony were tagging and everything,’ Burgundy, who is a street photographer, told KTLA’s John Fenoglio. ‘Last night there was a crew on one of the floors and people were coming out and getting detained by LAPD and getting cited and released. People were still in there tagging while the cops were down here.'”

“Nearly four years after work on what was envisioned as a project adding two signature towers to San Francisco’s skyline came to a full stop, some of the legal issues hanging over the notoriously stalled Oceanwide Center development at First and Mission streets appear to be headed toward a resolution. The former general contractors on the planned 2 million-square-foot project at 50 First St. — a joint venture between Swinerton and Webcor Builders — are seeking a judicial foreclosure and sale of the property. The unfinished project on a 1.2-acre site across the street from Salesforce Tower today is nothing but a gaping hole in the ground. Construction on the two-tower project — which was entitled for more than 1 million square feet of office space, a hotel and hundreds of new condos prior to the pandemic — was previously valued at $1.6 billion. The project never even made it out of the ground. Oceanwide halted construction on the smaller tower in the fall of 2019, at the time citing ‘local market changes and economic uncertainties.'”

“The tax bill is due for office towers in Boston, and with vacancy rates up and values down, many of the companies that own them are poised to ask the city for a break. There’s growing worry that the expected drop in overall office values could be something of a ticking time bomb for the years ahead. ‘Many office owners are facing existential risks,’ said Owen Thomas, CEO of Boston Properties, one of the city’s largest office landlords. ‘Many institutional owners want to diversify away from the office asset class.'”

“Experts discussed the impacts of remote work on commercial and office real estate in a CLE panel ‘How Doomed is the Loop?’ hosted by the Center for New York City Law on January 25th. According to the aforementioned paper, the decrease in revenue not only affects owners of commercial buildings but also local governments who rely heavily on property taxes from commercial buildings. Thus, the rise in work from home policies may lead to a lower quality of life for urban residents, a worsened business climate, and population loss. ‘Outward migration is starting to slow but it’s still above pre-pandemic levels and involves the top 40 percent of income makers. For every two people to leave, one person moves in, and this is a concern when thinking about keeping New York City’s economy growing,’ said Sean Campion, Director of Housing and Economic Development Studies at the Citizens Budget Commission. With real property and personal income taxes being the two main contributors to the City’s budget, the ‘urban doom loop’ may have even larger effects than once originally thought.”

“Faltering pre-construction condo sales and a record high inventory of unsold suites across the Greater Toronto Area could spell doom for Ontario’s planned housing boom, a new data study shows. ‘We’re moving in the opposite direction from where we should be going,’ said Shaun Hildebrand, president of Urbanation, a real estate consulting. Total unsold new condo inventory increased 41 per cent year over year to 22,477 units. Hildebrand said this level of condo glut has never been seen in the Toronto market.”

“Also concerning, he added, is the number of pre-construction projects that simply aren’t selling. In the final quarter of last year, a 31 per cent share of pre-construction projects in the GTA sold fewer than 30 per cent of their units. Developers typically need to sell 70 per cent of suites to start construction. This drop in pre-construction sales is expected to continue through 2024, Hildebrand said. ‘When you’re relying on private investors to drive sales activity to proceed with construction, there’s not a lot you can do when interest is at 22-year high,’ he said. Investors can also expect to see condo developers dangle more incentives, including better-priced units, reduced deposit amounts, better quality materials and rent guarantees.”

“From one of Canada’s tallest condo towers to bare tracts of land, residential development projects across the country are increasingly being pushed into receivership. ‘A year ago it was maybe a call a month, a call every two months, and now it’s a call a week,’ said Mike Czestochowski, vice-chair with CBRE’s land services group. ‘These projects that are under construction, they’ve seen such a rise in prices that they just, they run out of money,’ said Lauren White, executive vice-president of the firm’s land services group.”

“That was the case in Kitchener, Ont., where creditors filed for receivership against the owners of the Elevate Condominiums project, planned as four towers. By the time the filing was made in October, construction crews had already walked off the site, leaving it 80 per cent done but not weather sealed. A December report found that the owners had a mere $300 in the bank when the receiver order went through, and owe over $100 million. Other projects aren’t getting that far. Creditors on a planned 55-story condo tower in downtown Vancouver filed for receivership in mid-January, including BMO, which is seeking repayment of more than $82 million in loans.”

“Some projects run into trouble even after construction is largely complete. Duca Financial Services Credit Union Ltd. filed an application on Jan. 19 against a Mizrahi Inc. condo project at 128 Hazelton Ave. in Toronto, seeking repayment of its $16-million loan. While the largest developers can generally still secure funding, smaller ones are finding it hard to get more money as the second-tier lenders they often rely on become more cautious, said Czestochowski. ‘So as debt comes due, it’s a little bit more difficult.’ Ontario has seen the bulk of receiverships in recent months, but over the past year, the process has been applied to everything from a historic bank building in Saint John, N.B., to a fire-plagued apartment in Winnipeg.”

“Liverpool property and hotel developer Lawrence Kenwright has been declared bankrupt along with his wife, Katie. The news came via the government’s individual insolvency register, which confirmed that the married couple – well known as the owners of the Signature Living brand of hotels and apartments – each received bankruptcy orders at the Liverpool County Court on January 30. Autumn 2019 saw investors’ complaints really begin to stack up, and the ECHO began to receive more and more messages from investors worried they would never see returns on huge sums of money paid into Signature schemes. One man who had invested £300,000 told the ECHO he would be ‘finished’ if it was not returned – and that he had not even told his wife about the situation. Another woman said she had invested £77,000 – but had not received a penny back.”

“On Monday, news.com.au reported that Victorian construction firm Langdon Building Pty Ltd had gone into external administration, stopping all work for six weeks and plunging its 115 residential projects into uncertainty. James*, a former employee, who is still in touch with his ex-colleagues, said that Langdon Building staff had ‘been told they can either be made redundant or hold out for the next six weeks’ with no pay. Simon Bevan, 47, is anxious about what Langdon Building’s descent into administration means for his nearly-completed home. ‘It’s shattering,’ he said. ‘Now we’re in limbo and we don’t know for how long.'”

“The dad estimates that his $407,000 build is 98 per cent complete, but frustratingly, he can’t move in and now all work is being paused for the next six weeks at least. Mr Bevan, his partner and their three kids were planning to move into their new forever home in mid December, but this was then pushed back to February 12. ‘Financially it’s draining. Our rent is going up an extra $30 a week,’ Mr Bevan added. ‘It’s pretty much a full mortgage and full rent.'”

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This Post Has 103 Comments

  1. ‘After renting it in 2020 it’s become a legal nightmare. The only view he gets of the place is peeking over the fence, which currently resembles a garbage dump. ‘They don’t pay their garbage bill, which is mandatory in the city of Puyallup’

    Here’s a tip Glen. Pay the trash service yerself. I used to also pay water cuz they’ll let that go but keep using the toilet.

    1. let that go but keep using the toilet

      I’ve been watching episodes of Hoarders on Youtube, and a lot of episodes are like that. Water turned off.. they still use the toilet. Electricity off… they still put food in the refrigerator. It just stuns me how many people can’t function as civilized humans in society. Even the Romans did better.

      1. ‘Electricity off… they still put food in the refrigerator’

        Early on I had a UHS recommend that I don’t provide refrigerators. You may have one a previous tenant left behind, but put in the lease if it fails it won’t be replaced. So when I’d get the occasional toxic fridge left behind as you describe, tape it up and haul it off and no skin off my back.

        ‘It just stuns me how many people can’t function as civilized humans in society. Even the Romans did better’

        I don’t know about that. Usually when these sorts of things happen, something happened before. Job loss, divorce, domestic violence, strained tensions over children, drug use, criminal arrests or often more than one of the above. I don’t think Romans escaped the rags of life.

  2. ‘From one of Canada’s tallest condo towers to bare tracts of land, residential development projects across the country are increasingly being pushed into receivership…‘These projects that are under construction, they’ve seen such a rise in prices that they just, they run out of money’

    I’m confused. These people are the ultimate winnahs! They build igloos, how can they run out of pesos?

  4. ‘We are having a hard time getting anybody interested in it because they keep coming back to the high HOA fees,’ Miller said.”

    Cry me a river, speculator scum.

  5. “Meanwhile, existing HOA fees for condo owners have doubled in the past year.”

    Is this a sigh that Housing Bubble 2.0 is ready to pop?

    I recall our HOA fees climbing steeply just before we sold the condo we owned through year-end 2004. A few years later, the market value of the condo collapsed, along with much of the rest of the US housing market.

    I still don’t understand why HOA fees skyrocketed then or now…

    1. User
      Why are HOA fees skyrocketing?

      ChatGPT
      HOA (Homeowners Association) fees may be increasing for various reasons, including rising operating costs, maintenance expenses, insurance premiums, upgrades to amenities or infrastructure, legal fees, or reserve fund requirements for future repairs or improvements. Additionally, if the community is facing financial challenges or trying to enhance property values, fees might be adjusted accordingly.

    2. “…Meanwhile, existing HOA fees for condo owners have doubled in the past year…”

      Holding costs in all categories (property tax, HOA dues, insurance, maintenance) are all in a upward trajectory (at least here in SoCal).

      The day can’t be too far off when the total holding costs for a typical home meet or exceed typical mortgage.

      Of course, you will never see any mention in the MSM.

      1. I’m sure all of the extra property taxes collected by over inflated home valuations are making it into the school districts….Or taking care of the invading armies of illegals 🤔

    3. HOA fees — at least for condos — are skyrocketing because of a new rule that condos need to keep cash in reserve to pay for needed repairs. Too many condo HOA were living paycheck-to-paycheck (so to speak) and deferred maintenance for too long. That contributed to the pancaking of the Seaside condo building. It’s really killing the seniors on a fixed income.

  6. “Humboldt County is on the verge of passing a formal ordinance regulating short-term rentals such as Airbnbs and Vrbos in unincorporated parts of the county, though the final decision was delayed for a month.

    Die, speculator scum.

    1. Denver homeownership costs have grown 3 times rate of wages (2/1/2024):

      “The price of homes in Denver has more than doubled over the last decade, and similar trends have been seen across the state. But while average home prices have been increasing across Colorado, wages and salaries have not kept up at the same rate.

      CSI’s vice president of policy and research, Chris Brown, told FOX31 that CSI uses economic data from sources like the U.S. Bureau of Labor Statistics to create the “misery index,” which tracks mortgage rates and home prices to determine the cost of owning a home.

      “That’s what gives us that affordability index and what allows us to track the change in that index over time relative to wages,” Brown said.

      The report found that homeowners in the Denver metro area need to work about 114 hours to pay a mortgage in 2023, up 172.3% from the 42 hours required to pay a mortgage in 2013.

      According to the misery index, the cost of owning a home in Denver has increased by 18% since 2022, yet wages have only increased by 6%.

      “The cost of home ownership has grown three times the rate of wage growth in Denver, and that’s similar for many of these counties that we captured,” Brown said.

      https://kdvr.com/news/data/average-home-price-denver-affordability-vs-wages-2024-csi/

  8. For every two people to leave, one person moves in, and this is a concern when thinking about keeping New York City’s economy growing,’ said Sean Campion, Director of Housing and Economic Development Studies at the Citizens Budget Commission.

    Fear not, Sean. You’ve got busloads & busloads of illegals inbound for your sanctuary city.

  9. Autumn 2019 saw investors’ complaints really begin to stack up, and the ECHO began to receive more and more messages from investors worried they would never see returns on huge sums of money paid into Signature schemes.

    I love the smell of burning housing speculators in the morning. It smells like…victory.

  10. One man who had invested £300,000 told the ECHO he would be ‘finished’ if it was not returned – and that he had not even told his wife about the situation. Another woman said she had invested £77,000 – but had not received a penny back.”

    It would take a heart of stone to read about these housing speculator scum getting their heads handed to them, and not laugh.

  11. User
    Do hair-of-the-dog hangover cures have a shelf life?

    ChatGPT
    Hair-of-the-dog hangover cures, like consuming more alcohol to alleviate hangover symptoms, don’t have a “shelf life” in the traditional sense. However, they’re not a recommended or sustainable solution for managing hangovers. Over time, relying on this method can lead to dependency and exacerbate health issues associated with excessive alcohol consumption. It’s always best to opt for healthier, more sustainable methods for managing hangovers.

    1. Economy
      China is stepping up to save its economy this year, but the data just doesn’t seem to be getting much better
      Huileng Tan
      Feb 1, 2024, 4:46 AM ET
      Xi Jinping
      Lintao Zhang/Getty Images

      – China is struggling to stage a convincing economic recovery post pandemic, hitting investor confidence.

      – In January, authorities pulled about a dozen moves to stabilize a stock market rout and to support the property sector.

      – But China’s economic data isn’t encouraging, and investor confidence is still low.
      …
      https://www.businessinsider.com/china-economy-property-data-ugly-despite-support-stimulus-measures-crisis-2024-2

  14. Die speculator scum.

    Colorado Sun — Short-term rental owners opposed to Colorado bill that would quadruple their taxes plan to descend upon Capitol in protest (2/2/2024):

    “Next week, hundreds of property owners and small business owners – many from mountain towns – are planning to visit the state Capitol to voice opposition to Senate Bill 33 that nonpartisan legislative staffers estimate would increase property taxes for 24,100 short-term rental homes in Colorado.

    The legislation – sponsored by state Sen. Chris Hansen, a Denver Democrat, and aimed in part at easing the high-country housing shortage – would classify homes that are rented short-term for more than 90 nights a year as commercial lodging properties, which in 2023 were taxed at 27.9% compared with the 6.7% residential property tax rate.

    Proponents of taxing residential properties used as short-term rentals at the same rate as hotels, including Gov. Jared Polis, see it as a way to level the playing field and generate more money for schools and local districts, which are funded by property tax revenue. Some high-country hotels have converted into privately-owned short-term rentals in recent years, which proponents contend has reduced local government property tax revenues.

    Similar proposals to shift short-term rentals over to commercial tax rates have fizzled at the Capitol in recent years under pressure from short-term rental owners.

    https://coloradosun.com/2024/02/02/short-term-rental-opposition-senate-bill-33/

  15. Paul Krugman informs the ungrateful poors that the chocolate ration has been increased from 20g to 15g.

    New York Times — Our Economy Isn’t ‘Goldilocks.’ It’s Better (2/1/2024):

    “Contrary to what you may have heard, this is not a “Goldilocks economy” — get your children’s stories right, folks! Goldilocks found a bowl of porridge that was neither too hot nor too cold. We have an economy that is both piping hot (in terms of growth and job creation) and refreshingly cool (in terms of inflation).”

    ^ That is a LIE.

    “I believe that the risk of an economic slowdown is much higher than that of resurgent inflation and that rate cuts should come sooner rather than later. But that’s not the kind of argument that’s going to be settled on the opinion pages. What I want to talk about, instead, is what the good economic news says about policy and politics.

    It’s true that prices haven’t actually gone back down, but a one-time jump in prices is normal after a major disruption, like the conversion back to a peacetime economy after World War II or a pandemic that temporarily shut down normal activity.

    As typically happens when there’s a Democrat in the White House, the usual suspects are questioning the official data. But the strength of the job market and the fall in inflation are confirmed by many independent surveys of consumers and businesses.”

    https://archive.is/fAsyr

    The usual suspects?

    Look at some recent polls of how many people are worried about the cost of FOOD and HOUSING, you soft hands city boy.

    Keyboard pecker, phone screen tapper, soft, soft baby hands.

    2. My elderly neighbor has been a wreck because she can’t afford the rent increase that is coming our way, but she can’t afford to move anywhere else- either. She doesn’t make the 3x monthly requirements and rents for 2/1 apts here are $1400-$1800 a month. You might be able to find a studio for $1000, I’m not sure she can even do that after the fees they throw at you.

    3. I’ve been seeing some ads where you can “get your paycheck a couple days before payday.” It’s just another payday loan.

      In the past, people would pack up and move to a cheaper area, or move to where jobs are, Grapes of Wrath style. I’m not sure people have the money to even make a move. Maybe there’s a market for slumlords to offer a lease without paying the first and last month’s rent, or maybe not need 3x income to rent… with a ton of due diligence. Just to give people some mobility.

  16. Plans in store to clean up graffiti’d high-rise in Downtown LA
    NBCLA
    7 hours ago

    City leaders are scrambling to figure out a way to clean up the graffiti that’s vandalized an abandoned high-rise building in Downtown Los Angeles. Robert Kovacik reports for the NBC4 News on Feb. 1, 2024.

    https://www.youtube.com/watch?v=CZXII2lZFME

    3:39.

    2. “…clean up the graffiti that’s vandalized an abandoned high-rise building..”

      While they are at it why not clean up the feces, needles on the sidewalks and curbs, and move out the homeless in that area?

      BTW, If you ever drive the area near Crypto.com arena, be sure to lock all your doors.

      Downtown LA resembles a war zone and is getting worse.

    3. Those taggers must be dedicated if they are willing to climb up to 50 flights of stairs to vandalize the building.

      1. And have lots of $$ to buy spray paint.

        Spray paint used to be easy to steal in the big box home centers.

        At least in my area, spray paint has been locked up for a decade(s)

  17. ‘Fake Rich’ Millennials Are Lying About Income & Taking on Debt To Seem Wealthier

    https://www.yahoo.com/finance/news/fake-rich-millennials-lying-income-150053814.html

    [Some snips …]

    Whenever you scroll through social media, it’s not uncommon to see people showcasing lavish lifestyles — going on luxury vacations, shopping for designer clothes and eating gourmet meals. If you’ve ever thought to yourself, “How can they afford that?,” the answer may actually be that they can’t — even if they make a high salary.

    A recent Wells Fargo survey found that a third (34%) of affluent millennials sometimes lie or exaggerate about their income, savings or spending to maintain an appearance of financial success, and 40% of affluent millennials have taken on more debt than they want in order to live larger. These are higher percentages than among Gen Xers, boomers and members of the silent generation.

    So why are millennials more inclined to live above their means to give off a certain image?

    Even Affluent Millennials Are Struggling With High Living Costs
    The Wells Fargo survey found that 59% of affluent millennials feel it is important to “look or appear” financially successful to others through the way they dress, their car or their home, compared to 35% of Gen Xers, 14% of boomers and 7% of those in the silent generation. Yet, due to the circumstances in which this generation came into adulthood, affluent millennials may be struggling more than those of previous generations.

    “Affluent millennials are feeling what seems like the never-ending squeeze of inflation, which means that their housing, groceries and leisure activities — vacations, gym memberships, dining out and even streaming services — are costing them more money,” said Emily Irwin, managing director of advice and planning for Wells Fargo. “It’s also not uncommon for affluent millennials to still be paying off student loans, which resumed last fall.”

    At the same time that they’re struggling to maintain their financial footing, millennials, in particular, are being bombarded with images of their peers’ success — or what looks like success.

    “Social media is a daily reminder of the ‘haves’ and ‘have nots’ — or alleged ‘haves’ and ‘have nots’ — and this added pressure can force affluent millennials to make comparisons between themselves and others without knowing the true ‘balance sheet’ of their friends or influencers,” Irwin said.

    Why Affluent Millennials Are Taking on Debt
    The survey found that while 40% of affluent millennials have taken on more debt than they want in order to live larger, only 29% of Gen Xers, 6% of boomers and 4% of silent generation members have done the same. One reason that more millennials may be taking on higher levels of debt is that they have yet to adjust to the higher interest rate environment.

    “Affluent millennials have had the benefit of lower interest rates over the last few years. Therefore, they may have rationalized that it may have made sense to stretch for a dream home versus allocating dollars to a savings account that wasn’t yielding a high-interest rate,” Irwin said. “And it may make sense — assuming they’re setting aside funds for emergencies and not incurring revolving debt, like credit card debt.”

    Millennials may also be more inclined than older generations to take on debt because they are still far away from retirement.

    “Typically, they have the benefit of steady income and time — they likely are still earning a paycheck and know that retirement is decades away,” Irwin said.

    However, while there are rational reasons for affluent millennials to take on debt, it can sometimes get out of hand, especially given how easy it has become to overspend.

    “Affluent millennials grew up with online shopping and digital payments,” Irwin said. “I’d challenge them to not indulge the ‘consumer fix’ or ‘purchasing high’ that occurs as they snag a new item, but to wait 24 hours to check in with themselves to determine if they’re even still excited about the item.”

    Additionally, affluent millennials need to think about why they are willing to take on debt. Is it for a long-term investment, like a home, or is it just to look ‘rich’?

    “Affluent millennials’ behavior is driven by the core belief that it’s important to ‘look or appear’ financially successful,” Irwin said. “To accomplish this, they lean into stereotypical signs of affluence — luxury cars, homes and designer clothes. Forty-four percent of affluent millennials say it’s important to have visible signs of wealth like this, compared to 21% of Gen X, 8% of boomers and 7% of the silent generation.”

    Keeping Up False Appearances
    The Wells Fargo survey only included individuals who had at least $250,000 in investable assets, yet many millennials in this wealth bracket still admit to doing things to appear richer than they are.

    “Almost a third of affluent millennials buy things they cannot afford to impress others or fit in a certain lifestyle,” Irwin said. “They sometimes exaggerate about their income, savings or spending to maintain an appearance of financial success. As a result, this charade can be exhausting at the least, and in some instances, not sustainable.

    “It’s a vicious cycle because most people are reluctant to talk about their actual circumstances, and instead [want to project] the image of ‘I’m living my best life!’,” she continued. “It would be great if the trend would segue into, ‘share what you’ve done to be financially responsible.’ How freeing it would be if everyone ‘put their cards on the table’ and did not receive judgment or embarrassment?”

    Turning the Tide
    While some affluent millennials are living above their means, others have been scaling back.

    “More than half of affluent Americans have curtailed spending on luxury items post-pandemic — [including] 62% of [affluent] millennials — and 78% of affluent millennials report waiting on sales, discounts or coupons to buy items when they are marked down,” Irwin said.

    1. To accomplish this, they lean into stereotypical signs of affluence — luxury cars

      I was driving through the Culver’s drive through yesterday. Lots of pricey rides in that line. More than my little burg can justify based on median HH income.

          2. Wow, Neil sure looks unhealthy these days, dead chalky white skin, and WTF is up with that lipstick? Anyhow…

            I agree that lots of middle-class families won’t be able to service their debt going forward, and as we’ve seen before, when asset values slip below what is owed the payments will cease. The baby boomers are just too many in number for the shrinking cohorts to support them and their investments.

            On to Danielle…

          3. Powell cites the low unemployment numbers while ignoring that too many of these jobs don’t pay enough to live and paydown debt. Danielle is right about rising anger and frustration among the working class.

          4. low unemployment numbers

            Danielle acknowledges that Powell is using them as cover to do what needs to be done.

  20. The Financial Times
    US employment
    ‘Stunning’ US jobs growth of 353,000 far outstrips estimates
    Investors rein in interest rate cut expectations after January payrolls come in at almost double economists’ forecasts
    A jobseeker at a jobs fair in Kentucky
    Friday’s job figures indicate that the US labour market is hotter than policymakers and economists previously thought
    Claire Jones in Washington and Kate Duguid in New York 40 minutes ago

    The US economy added 353,000 jobs in January, almost twice as many than forecast, in “stunning” figures that led investors to slash expectations for a March interest rate cut.

    Economists had expected a 180,000 jobs increase for last month, according to an LSEG survey.

    Tom Simons, US economist at Jefferies, described the figures as “stunning numbers” that left him “near speechless”.
    …

    1. ‘Stunning’ US jobs growth of 353,000 far outstrips estimates

      I know more than a few unemployed code monkeys who are stunned by how hard it is to find a job these days. From what I read the bulk of those 300K jobs are in healthcare, hospitality and .gov

      The Centennial state added 3000 jobs, but if you strip out dot gov then about 5000 jobs were lost in December.

      1. There is a huge push to hire people in .gov, especially tech, because so many .govs are 68 y.o. boomers who finally had enough. We had of attrition at our office.

        IIRC, 50,000 of those 87,000 new IRS agents are just to replace attrition. I don’t have an explanation for the 37000 new ones…

        1. especially tech

          I thought you guys outsourced all that. Someone I know at the USDA has the title “Chief” in their IT dept. She once let it slip that all the technical contributors (code monkeys and IT folk) in her dept are contractors.

  21. Washington Post — Inflation has fallen. Why are groceries still so expensive? (2/2/2024):

    “Americans are finally getting a break from inflation, with prices for gasoline, used cars and health insurance all falling over the past year, relieving families and buoying President Biden’s 2024 reelection bid. But prices painfully remain high for one particularly frequent purchase: groceries.”

    ^ Correction: it’s not a “reelection” because he wasn’t elected in 2020.

    “Grocery prices have jumped by 25 percent over the past four years, outpacing overall inflation of 19 percent during the same period. And while prices of appliances, smartphones and a smattering of other goods have declined, groceries got slightly more expensive last year, with particularly sharp jumps for beef, sugar and juice, among other items.

    Stubbornly high grocery prices represent a critical drain on the finances of tens of millions of people and remain, along with housing, perhaps the most persistent economic challenge for the Biden administration as it tries to convince Americans the economy is back on solid footing. For all the attention on gas prices and housing, more than two-thirds of voters say inflation has hit them hardest through higher food prices, according to a November 2023 survey by Yahoo Finance/Ipsos. That’s more than 50 percentage points higher than any other category.”

    https://archive.is/7lHGv

    “tries to convince Americans the economy is back on solid footing”

    What a f*ing joke.

    1. It’s not just groceries, Utility bills are up. And while used car prices are shrinking, they are still stupidly overpriced.

      I took the car in for a recall. The stealership was chock full of new inventory. Very pricey new inventory.

          1. Got no explanation when the twice a week pickup became once a week. Adding insult to injury, the bill went up soon after.

    2. Inflation has fallen. Why are groceries still so expensive?

      Because your rapidly disappearing readership can’t understand that inflation is just a fancy word for “increase.” The increase in prices has fallen, not the prices themselves.

      On a side note, WaPo (or maybe NPR) pioneered that statement/question style of headline, and they deserve to go down for it.

      1. Why are groceries still so expensive?

        Might it also be because we have imported about 10 million mouths to feed?

    3. Bernie Sanders wrote a new book,called ITS O.K. TO BE ANGRY AT CAPITALISM.
      explains how policy and big corporations rig our system and contribute to inflation.
      If inflation is coming down why are corporations showing record profits?
      If they lowered prices and made less profit we would feel it at the cash register.

      1. Inflation is cumulative. It’s what we see at the store. Disinflation is a temporary slowing of the pace of price inflation. You’re confusing the two. I suspect you’re also confusing record profits for record revenue. With cumulative inflation, I would expect record revenues and record expenses resulting in the same profit margin prior to inflation.

        1. resulting in the same profit margin

          We’re meant to be confused. I watched the Canadian Marxist leader blame high food prices on the greedy grocery companies and cite their increased profits.

          2. And according to “our betters” like Neil Howe and Paul Krugman, I’m just an uneducated, low class Trump supporter. I’d wager big bucks they’re both p3dos.

  22. “…If you’ve ever thought to yourself, “How can they afford that?,” the answer may actually be that they can’t — even if they make a high salary….”

    If there was ever a ground zero for over-the-top fake money spending, it is here in the Newport Beach/Irvine SoCal area.

    For decades, have long believed that 90% of the residents really can’t afford their lifestyles but never had any hard data to prove it, only common sense and gut instinct.

    Interesting to see hard numbers from Wells Fargo.

    IMHO, Reality is even worse that what Wells Fargo reports.

  23. Schumer to Jam Senate with Immigration Deal Still Hidden from Public

    BRADLEY JAYE
    1 Feb 2024

    You have to pass it to find out what’s in it.

    Majority Leader Chuck Schumer (D-NY) will jam the Senate next week with the long-awaited migration-expanding border plan – with tens of billions in Ukraine aid to boot – he announced Thursday.

    The public has not yet seen the details of the legislation, and will have little time to examine the extraordinary implications of the deal before their Senators vote.

    Schumer said the text will be revealed by Sunday with procedural measures setting up the bill’s pathway through the Senate beginning Monday, enabling a possible vote on final passage by the end of the week.

    The rushed schedule is no surprise. Sen. Kyrsten Sinema (I-AZ), one of three lead negotiators, has said she wants to rush the deal through the Senate before the public can react.

    This week Sen. Mike Lee (R-UT) ushered a resolution through the Senate Republican Conference to ensure Senators had at least two to three weeks to review any deal.

    Notably, Minority Leader Mitch McConnell (R-KY), perhaps Washington’s most fervent admirer of Ukrainian President Volodymyr Zelenskyy and proponent of military, humanitarian, and economic aid to Ukraine, voted against Lee’s resolution.

    https://www.breitbart.com/politics/2024/02/01/schumer-to-jam-senate-with-immigration-deal-still-hidden-from-public/

  26. 64 Times the Biden Administration Intentionally Undermined Border Security

    January 9, 2024

    For Immediate Release

    WASHINGTON — Last week, in a weak attempt to shift blame for a crisis their own policies created, the White House clumsily tried claim that House Republicans had an “anti-border security record” by voting to “eliminate over 2,000 border patrol agents and erode our capacity to seize fentanyl.”

    These claims were demonstrably untrue, previously disproven, and underscored the Biden Administration’s failure to secure our southern border, marked by record high crossings in December and widespread national recognition that the situation at our border is a crisis.

    “Since his first day in office, President Biden and his administration have worked to systematically undermine America’s border security,” Speaker Johnson said. “On more than 60 occasions, he has manipulated the federal bureaucracy to open our borders to illegal immigrants, human trafficking, fentanyl, and potential terrorists. The result is a humanitarian and national security catastrophe. The President must use his executive authority to repair what he has broken. I am calling on him to do so. “

    Below are 64 instances of the Biden Administration undermining border security policy and encouraging illegal immigration. Click here to download this document with source links and corresponding data on encounters, number of children smuggled, and fentanyl seized.

    https://www.speaker.gov/64-times-the-biden-administration-intentionally-undermined-border-security/

    1. On a dot gov website, no less.

      New York Times and Washington Post won’t report this, because they are the enemy of the American people.

  27. ‘After more than three years and all the damage, the court ruled for Glen to regain control of his home. Seeing the extensive damage brought Glen to tears. ‘I Just want to get it over with, and I never want to come back. This is the last time I want to be here’

    Dang Glen, you didn’t even pay anything fer the shack and you still took an a$$pounding.

  28. ‘What these cities have in common, especially Austin and San Antonio, is that they used to be among the most overheated markets in the country. Austin and San Antonio experienced the highest home-price appreciation in recent years during the pandemic’

    via GIPHY

    ‘This correction appears to still be ongoing. The average Austin home value was $527,205 as of December 31, down 8.2 percent compared to a year before, according to Zillow. Prices have been dropping consistently since reaching a peak of $630,308 in June 2022’

    OK so 200k crater where? Austin SF shacks only, metro Austin which could include entire counties that have nothing to do with Austin? They just baffle you with statistical BS down there.

  29. ‘Second District Supervisor Michelle Bushnell asked if there could be exceptions to the cap. Her district does not face the same housing crunch present in the rest of the county given its historic reliance on cannabis cultivation, an industry currently in a tailspin due to several factors such as statewide overproduction. In 2023’s third financial quarter, Garberville, in Bushnell’s district, saw some of the highest foreclosure rates in the country. ‘If we don’t offer options, and people get into a really sticky situation with their mortgages, they’re going to do it anyways’

    They are still winnahs! Michelle, never forget that. You should continue to support them so they can scrub toilets fer strangers every day and pay that mortgage patriots!

  30. Brampton, Mississauga & Durham Real Estate Update – Is Suing REALLY The Answer?
    Team Sessa Real Estate
    3 minutes ago

    In this episode we take a look at the current Brampton, Mississauga, Ajax, Whitby, Pickering Real Estate home prices and market trends for week ending Jan 24, 2024. We also discuss if it really is worth all the effort to sue someone over a recent purchase.

    https://www.youtube.com/watch?v=qG9pe2QpwiM

    16:19.

  31. ‘the decrease in revenue not only affects owners of commercial buildings but also local governments who rely heavily on property taxes from commercial buildings. Thus, the rise in work from home policies may lead to a lower quality of life for urban residents, a worsened business climate, and population loss. ‘Outward migration is starting to slow but it’s still above pre-pandemic levels and involves the top 40 percent of income makers. For every two people to leave, one person moves in’

    Remember when you were making people eat sit down dinners out on the sidewalk in weird bubble structures and wear a mask standing 6 feet apart? It broke you New York City and I warned that it might.

  32. ‘When you’re relying on private investors to drive sales activity to proceed with construction, there’s not a lot you can do when interest is at 22-year high’

    They’re fooked Shaun, we already knew that.

    ‘Investors can also expect to see condo developers dangle more incentives, including better-priced units, reduced deposit amounts, better quality materials and rent guarantees’

    That’s the spirit, fook those previous buyers!

  33. ‘One man who had invested £300,000 told the ECHO he would be ‘finished’ if it was not returned – and that he had not even told his wife about the situation. Another woman said she had invested £77,000 – but had not received a penny back’

    Which brings up that matter of ‘money you can or can’t afford to lose.’ Just what can you afford to lose?

  35. According to The Hill, polls show JB 6 points ahead of DJT and Nikki has a 13 point lead on JB. At the same time, DJT is winning over Haley by huge margins in the Primaries.

    It’s like a Escher drawing where the stairs go up and down at the same time.

  36. Downtown Boston is scary for MANY reasons – empty/crime etc

    It was atrocious in the 1970s/80s as well.

    Probably will have to raise residential property tax since commercial tax is the major funder of almost all municipal services unless they can get the colleges/university “non profits” to actually pay more than the current ZERO!

    1. Yahoo
      Business Insider
      Markets are now betting the Fed is going to make a mistake with rate cuts, BofA says
      Aruni Soni
      Fri, February 2, 2024 at 7:13 PM PST·2 min read
      US Federal Reserve Chair Jerome Powell
      Jerome Powell has some big decisions ahead of him.
      Liu Jie/Xinhua via Getty Images

      – Markets are now betting the Fed is going to make a mistake with rate cuts, BofA says

      – While prospects of a March rate cut have dimmed, investors still expect aggressive rate cuts this year.

      – “Markets are still pricing about six cuts over the course of this year. This suggests to us that they are pricing in a policy error.”

      Jerome Powell probably wanted to reduce some investor bullishness with his comments about a March rate cut at the Fed’s January meeting. Instead, markets are now betting the Fed is going to make a mistake, according to Bank of America.

      “Markets are pricing a policy mistake,” analysts wrote in a note Friday.

      The Fed signaled this week that a March rate cut is unlikely, with Powell insisting there needs to be a continuation of “good data” to bring an end to the pause in interest rate hikes. But that didn’t dim investor optimism about cuts for the rest of the year.

      “Powell’s strong statement about March lowered pricing of a March cut, but markets are still pricing about six cuts over the course of this year,” Bank of America analysts wrote. “This suggests to us that they are pricing in a policy error.”

      Previously, central bank officials have said they foresee about three rate cuts in 2024. And yet, markets have continued expecting more, with some predicting as many as six cuts. Investors were also more optimistic about the timing of the cuts, hoping that the first cut would arrive early. The CME FedWatch Tool showed traders were wagering a 70% chance the Fed would pivot in March early last month.

      The data now says traders place the odds that the Fed will hold rates steady in March at over 80%. But they still expect aggressive cutting in 2024 for a total of around 100 basis points.

      “Going into the January meeting, we thought it was more important for the Fed to push back against market pricing of the speed of rate cuts rather than the timing of the first cut,” the analysts wrote. “Yet the Fed achieved the exact opposite.”

      Wall Street bulls like Tom Lee were also more certain about rate cuts after Powell’s hawkish remarks this week. Others think the real mistake is a Fed that cuts too early.

      “If the Fed wants to cut rates at a quarterly pace, it has a lot of work to do in terms of moving market pricing, and it runs the risk of inducing meaningful financial tightening,” the analysts wrote.
      …
      https://finance.yahoo.com/news/markets-now-betting-fed-going-031318226.html

    1. Financial Times
      Chinese equities
      ‘Uninvestable’: China’s $2tn stock rout leaves investors scarred
      Some global fund managers fear government efforts to stabilise the market are too little, too late
      Shenzhen Stock Exchange building
      Offshore investors trading Chinese equities through Hong Kong’s stock connect programme have continued to dump Shanghai- and Shenzhen-listed stocks
      Hudson Lockett in Hong Kong and Joseph Cotterill in London yesterday

      Chinese authorities’ promise of “forceful” measures last week was their most vocal attempt yet to halt a stock market sell-off that has wiped out almost $2tn in value. For many investors at a Goldman Sachs conference in Hong Kong, that vow was too little, too late.

      More than 40 per cent of those surveyed while attending a session on Chinese equities held by the US bank on Wednesday said they believed the country was “uninvestable”. That came just a day after the country’s vice-premier openly called for “more forceful and effective measures to stabilise the market and boost confidence”.

      “That many people in Hong Kong voting no [on Chinese equities] is pretty high relative to the constructive home team baseline you typically find,” said Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, adding that the poll results were “emblematic” of the difficulties facing China’s stock market.
      …

    2. China at risk from ‘rapid’ housing downturn as stock market hits new five-year low
      Growth of world’s second largest economy expected to slump from 5.4pc to 3.4pc by 2028
      Melissa Lawford 2 February 2024 • 1:03pm
      Evergrande

      China’s economy is highly exposed to shocks after the “rapid” downturn in its housing market, the International Monetary Fund (IMF) has warned.

      Housing investment in China is likely to fall by between 30pc to 60pc compared to 2022 levels, the IMF said in a report. As a result, it said economic growth will slump from 5.4pc in 2023 to just 3.4pc by 2028 as its population and workforce shrinks.

      Years of “excessive” investment in infrastructure and housing means the world’s second largest economy is now highly exposed to property market shocks, just as it grapples with weak productivity and an ageing population, the IMF said.

      Starts on new homes in China have plunged by more than 60pc compared to pre-pandemic levels.

      Henry Hoyle and Sonali Jain-Chandra, who authored the report, said this drop was “a historically rapid pace only seen in the largest housing busts in cross-country experience in the last three decades”.

      William Hurst, a professor at the University of Cambridge, added: “This isn’t a blip. It is going to have to be a long-term deflation of a very long-inflated bubble.

      “It’s really a structural issue more than a cyclical one. There’s been a strong over-reliance on land use sales and property development, at least since 2007. That has got worse and worse.

      “Local governments are heavily dependent for their revenue on land and a tremendous amount of household wealth is in property.”

      China’s stock markets plunged to a fresh five-year low earlier this week as state support measures failed to convince investors that Xi Jinping can overcome the country’s economic headwinds.

      President Xi has stepped in to bolster China’s ailing property sector with measures such as expanding access to loans for developers, but the IMF said support needs to go further.

      China needs to wind up “unviable” property developers, and help those with better prospects to repair their balance sheets, the IMF said.

      The country’s property downturn began at the end of 2021 with the collapse of Evergrande, which has more than $300bn in debt and was this week served with a liquidation order by a Hong Kong court.

      Evergrande’s demise sent shockwaves through the property sector, triggering a wave of smaller defaults and a massive slump in transactions.

      The problems have since spread to another property giant, Country Garden, which was once China’s largest developer and now has around $200bn in liabilities. It defaulted on a bond payment last autumn.

      If the property sector contracts by much more than expected, it will hit household wealth, dampening consumer demand, as well as increasing the strain on local government finances, which largely rely on selling land to developers.

      This would create dangerous “feedback loops” as a drop in spending would bring new disinflationary pressures, the IMF warned.

      At the same time, China is ageing. Its population shrank by two million last year. “The need for additional new housing will diminish in coming years as the population declines and urbanisation slows,” Mr Hoyle and Ms Jain-Chandra said.

      Geopolitical risks and weaker than expected global demand for Chinese exports as a result of high interest rates also pose major risks to China’s economy, the IMF said.
      Business Briefing Newsletter
      …
      https://www.telegraph.co.uk/business/2024/02/02/china-at-risk-housing-downturn-stock-market-five-year-low/

      1. User
        Is this statement true for the US?

        “Local governments are heavily dependent for their revenue on land and a tremendous amount of household wealth is in property.”

        ChatGPT
        Yes, that statement is generally true for the United States. Local governments often rely heavily on property taxes as a significant source of revenue, and a substantial portion of household wealth in the US is tied up in property ownership.

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